It has been a great day for the Panoramic Resources Ltd (ASX: PAN) share price.
In afternoon trade, the ASX nickel share is up 15% to 15.5 cents.
Investors have been scrambling to buy its shares after it was the subject of a bullish broker note.
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Who is bullish on this ASX nickel share?
The team at Morgans is bullish on Panoramic Resources and is tipping major upside for its shares over the next 12 months.
According to a note, the broker has retained its add rating with a 25 cents price target.
Based on the current Panoramic Resources share price, this implies potential upside of 61% for this ASX nickel share between now and this time next year.
Why is Morgans bullish?
The broker notes that Panoramic Resources has just released an updated mine plan for the Savannah Nickel Operation, which underlines a 12+ year operating life, with strong upside to extend.
In addition, it highlights that its operations are steadily ramping up and design production levels are forecast to achieve its target mine rate of 960ktpa in early FY 2024.
Morgans believes this leaves it well-placed to deliver strong earnings growth in the coming years. In fact, it is forecasting a net profit of $5.8 million this year. After which, it forecasts $22.2 million in FY 2024 and $43.4 million in FY 2025.
In light of this, the company is the broker's preferred nickel exposure on the ASX right now. It commented:
PAN is our preferred nickel exposure on the ASX with a 12+ year mine life, on track to reach nameplate production this year, and significant exploration at both Savannah, Savannah North and regional targets.
While our DCF valuation is built on PAN's published study operating life only, based on recent positive drilling results beneath Savannah workings, and open-ended mineralisation at Savannah North, we see strong potential to increase the mine life through upcoming exploration and Resource definition drilling to re-classify Inferred and Indicated Resources into mineable Reserves.
PAN also produces copper and cobalt in concentrate, giving significant by-product credits and additional revenue over the life of mine.
